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ABC and CVP Analysis: Multiple Products Good Scent, Inc., produces two colognes: Rose and Violet. Of the two, Rose is more popular. Data concerning the two products follow: Rose Violet Expected sales (in cases) Selling price per case Direct labor hours. 49,000 9,800 $102 $83 32,200 5,750 9,300 3,500 48 Machine hours Receiving orders Packing orders Material cost per case $50 Direct labor cost per case $10 $9 The company uses a conventional costing system and assigns overhead costs to products using direct labor hours. Annual overhead costs follow. They are classified as fixed or variable with respect to direct labor hours. Fixed Variable $ - $174,570 187,500 204,930 203,500 150,000 Direct labor benefits Machine costs Receiving department Packing department 104 28 53 $43

ABC and CVP Analysis: Multiple Products Good Scent, Inc., produces two colognes: Rose and Violet. Of the two, Rose is more popular. Data concerning the two products follow: Rose Violet Expected sales (in cases) Selling price per case Direct labor hours. 49,000 9,800 $102 $83 32,200 5,750 9,300 3,500 48 Machine hours Receiving orders Packing orders Material cost per case $50 Direct labor cost per case $10 $9 The company uses a conventional costing system and assigns overhead costs to products using direct labor hours. Annual overhead costs follow. They are classified as fixed or variable with respect to direct labor hours. Fixed Variable $ - $174,570 187,500 204,930 203,500 150,000 Direct labor benefits Machine costs Receiving department Packing department 104 28 53 $43

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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ABC and CVP Analysis: Multiple Products Good Scent, Inc., produces two colognes: Rose and Violet. Of the two, Rose is more popular. Data concerning the two products follow: Direct labor benefits Machine costs Receiving department Packing department Rose Expected sales (in cases) Selling price per case Direct labor hours Machine hours Receiving orders Packing orders 104 Material cost per case $50 Direct labor cost per case $10 The company uses a conventional costing system and assigns overhead costs to products using direct labor hours. Annual overhead costs follow. They are classified as fixed or variable with respect to direct labor hours. Fixed $ 49,000 9,800 $102 32,200 5,750 9,300 Violet 203,500 48 150,000 $83 3,500 28 53 $43 $9 - $174,570 187,500* Variable 204,930
Transcribed Image Text:ABC and CVP Analysis: Multiple Products Good Scent, Inc., produces two colognes: Rose and Violet. Of the two, Rose is more popular. Data concerning the two products follow: Direct labor benefits Machine costs Receiving department Packing department Rose Expected sales (in cases) Selling price per case Direct labor hours Machine hours Receiving orders Packing orders 104 Material cost per case $50 Direct labor cost per case $10 The company uses a conventional costing system and assigns overhead costs to products using direct labor hours. Annual overhead costs follow. They are classified as fixed or variable with respect to direct labor hours. Fixed $ 49,000 9,800 $102 32,200 5,750 9,300 Violet 203,500 48 150,000 $83 3,500 28 53 $43 $9 - $174,570 187,500* Variable 204,930
company Direct labor benefits Machine costs Receiving department Packing department Total costs * All depreciation Fixed $ $174,570 187,500* 204,930 203,500 150,000 $541,000 $379,500 Variable Break-even cases of Rose Break-even cases of Violet Required: 1. Using the conventional approach, compute the number of cases of Rose and the number of cases of Violet that must be sold for the company to break even. In your computations, round variable unit cost to the nearest cent and round the number of break-even packages to the nearest whole number. cases cases doing areve te 2. Using an activity-based approach, compute the number of cases of each product that must be sold for the company to break even. In your computations, round all computed amounts to the nearest cent and round the number of break-even packages to the nearest whole number. Break-even cases of Rose Break-even cases of Violet cases cases
Transcribed Image Text:company Direct labor benefits Machine costs Receiving department Packing department Total costs * All depreciation Fixed $ $174,570 187,500* 204,930 203,500 150,000 $541,000 $379,500 Variable Break-even cases of Rose Break-even cases of Violet Required: 1. Using the conventional approach, compute the number of cases of Rose and the number of cases of Violet that must be sold for the company to break even. In your computations, round variable unit cost to the nearest cent and round the number of break-even packages to the nearest whole number. cases cases doing areve te 2. Using an activity-based approach, compute the number of cases of each product that must be sold for the company to break even. In your computations, round all computed amounts to the nearest cent and round the number of break-even packages to the nearest whole number. Break-even cases of Rose Break-even cases of Violet cases cases
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